How to buy into the stock market

On Friday, October 14, 2011 I participated on the “I Survived Real Estate 2011” panel at the Nixon Library in Yorba Linda, California to discuss the state of the real estate market including on-going industry regulations, upcoming legislation, bailouts, and opportunities for real estate investors. The panel was moderated by Bruce Norris, President of The Norris Group, a residential real estate firm that invests in California real estate, funds millions in hard money loans for investors every month, and produces education and resources for real estate professionals.

An October interview of me by Bruce Norris is available here.

Also on the panel with me were:

• Gary Thomas, First Vice President, National Association of Realtors

Rising October retail sales numbers are being reported as a sign of economic recovery, especially auto sales, but the stock market knows better. We’ve been tracking producer price inflation increases since early 2009 on the expectation that six months to a year after input costs rise in response to monetary policy, consumer prices will rise disproportionately to rising demand as the economy recovers. Retail sales data are not inflation-adjusted and our analysis indicates that the widely reported increase in retail sales to consumer is in fact largely inflation. Consumer price inflation is finally arrived and the stock market doesn’t like it one bit. More …

World Bank chief surprises with gold proposal

The world’s largest economies should consider gold as an indicator to help set foreign exchange rates, the head of the World Bank said on Monday in a proposal that threw open the acrimonious currency debate just before a summit of G20 nations.

Writing in the Financial Times, World Bank President Robert Zoellick called for a new monetary system to replace the floating rates adopted in 1971 known as Bretton Woods II.

AntiSpin: On January 3, 2006 I started a site called The Fourth Currency where I asserted:

A return to the Bretton Woods international gold standard created in 1944 is inevitable .

Thirty-seven years ago the world’s economies started on the circular track back to Bretton Woods. We will sooner or later be back where we started, with international transactions guided by a fixed gold price.

So there’s your answer. It was inevitable to me in 2006. Still is.

America’s free ride is almost over. Thank the leaders of both parties who built the FIRE Economy on the foundation of the Dollar Cartel since 1971. More …

More bad craziness from our economic policy leadership. This is Smoot-Hawley version 2.0.

The Smoot–Hawley Tariff Act of 1930 turned a major recession into The Great Depression by launching a trade war in the middle of a global downturn. World trade fell by 66% between 1929 and 1934. As Milton Friedman said, governments never learn. More …

Today I received the following email from a conservative friend. As a small L libertarian, what do I think of the new real estate tax? I’m glad she asked for my opinion but I’ don’t think she’s going to like

my answer: it’s time to cut taxes on productive economic activity and raise them on non-productive pursuits. More …

Sep 15, 2010

Billionaire George Soros, whose hedge fund, Soros Fund Management LLC, has been heavily invested in gold and gold-mining companies, told Reuters on Wednesday that gold prices might continue to rise after printing record highs this week, but warned that the precious metal is the “ultimate bubble.”

Reuters: “Gold is the only actual bull market currently. It just made a new high yesterday. In the present circumstances that may continue,” he said at a Thomson Reuters Newsmaker event.

“I called gold the ultimate bubble, which means it may go higher. But it’s certainly not safe and it’s not going to last forever,” he said.

According to Reuters, Soros also said that “after asset classes set new highs there are almost always immediate reversals that disappoint investors.”

Spot gold on Tuesday set a new all-time high of $1,270 per ounce, well above the previous all time high of $1266.50 per ounce.

The gold price Wednesday has traded as high as $1,273.50 and as low as $1,266.80.

AntiSpin: Soros joins a long line of “experts” on gold who did not identify the bottom of the gold market and buy at $270 in 2001 when we did but entered the market recently after gold had already increased more than three fold in price. Gold cannot have been a bubble for the past nine years. The idea is patently absurd. Gold did not suddenly turn into a bubble just because Soros or anyone else happened to start to notice in 2008 what we noticed and acted on nine years ago, that the gold price was due to rise. Our price target of $2500 to $5000 made then when gold traded at slightly more than 1/10 to 1/20 of that price sounded insane at the time. Now that it sounds likely it’s parroted by a small army of gold market tourists. More …

Sept. 14, 2010 WASHINGTON (AP) — Retail sales rose in August by the largest amount in five months, adding to evidence that a late spring economic swoon was temporary and not the start of another recession.

Retail sales increased 0.4 percent last month, the Commerce Department said Tuesday. It was the second straight monthly increase and the biggest gain since March.

Excluding a decline in autos, retail sales increased 0.6 percent. That followed two relatively flat months and a sharp drop in May.

AntiSpin. Today’s retail sales numbers are misleading. Consumers are not buying more stuff, they are paying more for it. Consumer price inflation is rising. That’s why gold prices spiked from $1250 to $1270 on today’s retail sales news. More …

Five years later it still isn’t. Today Thomson Reuters published its PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report and Data: only three technology market segments show positive growth over 1999 investment levels with the remaining segments still off 13% to 98% more than a decade after the bubble peak. More …